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Defence, Governance, Investing, Leadership

All Australian national security agencies opposed China power grab

 Federal Treasurer Scott Morrison said the decision was not "country specific".

Federal Treasurer Scott Morrison said the decision was not “country specific”

Every one of Australia’s national security agencies advised against allowing NSW power asset Ausgrid to be leased by Chinese state-owned company State Grid Corporation, or Hong Kong-based Cheung Kong Infrastructure, sources have revealed.

It is understood the agencies, ranging from the Department of Defence to ASIO, recommended separately to both Treasurer Scott Morrison and the Foreign Investment Review Board that the bids be blocked on national security grounds.

“It was not a contested issue,” said a source.

Mr Morrison has taken flak domestically over the decision on Thursday to veto the bids because they were contrary to the national interest.

Mr Morrison said both parties had a week to try again but there is little sign he will change his mind. However, both CKI, which is a private company, and State Grid are understood to be considering linking up with local infrastructure investors to keep their $10 billion-plus acquisition ambitions afloat.

They would, however, walk away if they are required to give up on operating control to get foreign investment approval.

Both CKI and State Grid have been locked in talks with advisors and the NSW government as they struggle to decipher Mr Morrison’s decision.

Both are understood to be willing to discuss the ownership percentage that they would gain in Ausgrid, opening the door for the bidder’s stake to fall below the majority 50.4 per cent on offer under the NSW’s privatisation process.

Operating control

But the question of operating control has rapidly emerged as a potential deal-breaker, with neither bidder willing to cede on that point. Their respective bid prices – rumoured to be up to $13 billion or more in the case of State Grid – would also no longer be valid without the benefit of being able to control the assets.

The NSW government is understood to be in close communication with the bidders and with the federal government as it tries to push forward with the auction.

Several local pension funds and infrastructure investors are thought to have approached CKI and State Grid to discuss the possibility of partnering up on their offers.

There was blowback from China Friday with state-owned Xinhua News Agency opining that the decision could lead to a “toxic mindset” of “Chinaphobia” in Australia.

“To suggest that China would try to kidnap the countries’ electricity network for ulterior motive is absurd and almost comical, since it is widely recognised in the world that business reputation is critical to any corporate activity,” said opinion writer Luo Jun.

Mr Morrison claimed the decision was not “country specific” but related to “very specific characteristics of this asset and then how that related to the structure of this transaction”.

“Both the structure of the transaction, the fact that control of operations was a factor here, accentuated those risks and then on top of that you have just the broader national security issues that relate to the asset as a whole,” he said.

He and Prime Minister Malcolm Turnbull both pushed back at allegations that the decision was driven by domestic political pressures, given that Pauline Hanson, Bob Katter and Nick Xenophon opposed any sale to the Chinese of such a critical asset.

“This was not a political decision. This is a decision that was taken with the utmost seriousness by the government,” Mr Turnbull said.

Unequivocal advice

“A decision of considerable gravity, I can assure you, but it was taken based on the unequivocal advice of our national security agencies.” 

To underscore his point, Mr Turnbull said the Opposition would be given a classified briefing by the security agencies.

Other security agencies included the Department of Foreign Affairs, the Australian Signals Directorate and the Office of National Assessments.

One of the fiercest critics of the decision came from former Labor foreign minister & China investment Lobbyist Bob Carr, who now heads the pro-Beijing  Australia-China Relations Institute.

Mr  Carr  accused the government of succumbing “to the Witches’ Sabbath of xenophobia and economic nationalism”.

Mr Morrison said Mr Carr was spouting “complete nonsense”.

NSW Premier Mike Baird, who faces a shortfall of up to $4 billion in his infrastructure plans, said he was frustrated he was not told sooner that the two bidders  faced major security concerns.

“My main frustration in this process is that I believe the decision should have been made much earlier,” Mr Baird said.

“There were a number of milestones along the way. I think it’s an opportunity to deal with this many months ago. Having said that, it’s complex. It is not easy. There are different structures, different formats and in that context, you know, we need to get to make sure we get it right and I accept that.”

NSW took the highly unusual step of accepting final bids from the two bidders before receiving Foreign Investment Review Board approval, apparently confident that it would not pose a problem.

Original article here

 

China’s patriots among us: Beijing pulls new lever of influence in Australia

Philip Wen

Chinese spies at Sydney University – China spreads its watching web of surveillance across Australia

As Malcolm Turnbull prepares to embark on his first official visit to China as prime minister, some 60 Chinese community leaders in Australia gathered in Sydney urging him to watch his words when discussing the South China Sea in Beijing.

Unfurling a large red banner declaring the need to “Firmly Safeguard the Sovereign Rights of China in the South China Sea”, the forum was organised by the overseas Chinese patriotic association Australian Action Committee for Peace and Justice.

“Australia’s political elite should have a clear understanding,” the committee’s chair Lin Bin said at the Saturday meeting. “[They] ought to talk and act carefully on the sensitive issue on the South China Sea, and not make ‘irrational’ or incorrect signals to the international community.”

The rhetoric of freedom of navigation, freedom of overflight, international arbitration, changing the status quo and “militarisation” of the South China Sea, it said, were all mere buzzwords utilised by the United States as part of its strategic pivot back to the Asia-Pacific – “naked hegemonic behaviour” aimed at containing China’s rise.

What were previously fringe nationalistic and patriotic Chinese associations in Australia are now emboldened in the search for greater domestic political influence with the implicit backing of a rising China and its increasingly assertive foreign policy.

The action committee has close ties with the local Chinese embassy and consulates, as well as the Australian Council for the Promotion of Peaceful Reunification of China, an organisation under the umbrella of China’s United Front which rails against independence movements in Tibet, Taiwan and Xinjiang. The council is chaired by Huang Xiangmo, a prolific donor to both major Australian political parties, as well as the founding donor of the Australia-China Relations Institute at the University of Technology, Sydney.

“I can see in Australia, in the United States, even Europe, very strong lobby groups who work very closely with the Chinese government,” said Feng Chongyi, an associate professor of Chinese Studies at UTS. Dr Feng is not attached to ACRI.

In Australia, patriotic associations coordinated protests outside Japanese diplomatic missions at the height of the Senkaku/Diaoyu islands dispute.

They rallied crowds to counter pro-Tibet and Falun Gong protesters at the Australian legs of the Beijing Olympics torch relay and most recently, outside Parliament House as Xi Jinping delivered a speech to both houses during his 2014 visit.

Prime Minister Malcolm Turnbull at the Chinese New Year Lantern Festival in Sydney. Photo: ACETCA

Dr Feng said some leaders of patriotic associations were businesspeople keen to ingratiate themselves with mainland officials – behaviour that would never hurt someone with business interests straddling Australia and China.

“They would use the term national interest but it’s really their own corporate interests that they can bind together with the [soft power ambitions] of Chinese authorities,” he said.

There are signs the nationalistic rhetoric is targeting a wider mainstream – and younger – audience in the Chinese community. One of the first and most widely spread reports of Saturday’s Action Committee meeting was carried by the Chinese-language WeChat news outlet Australia Today and affiliate Sydney Today.

The news outlets consistently reach a large, young audience via the ubiquitous Chinese social media application with its blend of news and light entertainment tailored for young Chinese students and professionals living in Australia.

All WeChat news outlets, or “official accounts” are registered in China and by extension are subject to monitoring from mainland censors, and while many articles are translated from mainstream Australian media outlets, reports critical of the Chinese government are invariably avoided.

The lengthening arm of Chinese soft power in Australia also extends to cultural events.

Fairfax Media has learned that Sydney-based media group Nanhai Media received tens of million of yuan in direct funding from the State Council’s Overseas Chinese Affairs Office to help put on the colourful Chinese New Year lantern display at Tumbalong Park in Sydney in February.

Bo Zhiyue, director of the New Zealand Contemporary China Research Centre at the Victoria University of Wellington, says the size of the contribution was unheard of. “They probably can go back and say now we have won over the hearts and minds of the Chinese community in Sydney,” he said.

While the Communist Party has long sought to cultivate “loyalty” among overseas Chinese communities, the influx of recent mainland migrants and residents means for the first time it has a potential critical mass to lobby for its strategic interests, including on the South China Sea and greater acceptance of state-owned investment in Australian assets.

But the shifting demographics have also created a schism in Australia’s Chinese communities. Many naturalised Chinese-Australians who migrated in the 1980s and 90s did so with the spectre of the Tiananmen Square crackdown of 1989 fresh in their memories, and continue to harbour critical views of China’s Communist leadership. It jars with more recent mainland migrants, many who have been enriched by China’s economic miracle of the past two decades, and university students bankrolled by their parents buying up inner-city apartments.

“If you follow those analyses that some of those overseas Chinese students come from very rich backgrounds – Communist Party officials and businesspeople – they are naturally linked between them and the regime back home,” Dr Feng says. “And of course they feel they are not treated very well overseas by those ‘hostile forces’ or the foreigners; that increases their criticism of the West and also the western media.”

 

Original article here

 

John Menadue. The new compradors and the China-Australia Free Trade Agreement

Compradors are sometimes described as those who help a foreign country exploit their own. I was reminded of this when I read that the ALP Caucus had compromised its concerns over jobs for Australians and was prepared to waive the China-Australia Free Trade Agreement through the parliament with only a ‘diluted’ list of demands as the AFR put it.

If this agreement proceeds, Australian workers are likely to be much more vulnerable. Not surprisingly the President of the ACTU, Ged Kearney said that ‘this is about Australian jobs so we will keep fighting for those jobs’. No wonder the unions are unhappy about the attitude of Labor parliamentarians.

There is a problem; a large Labor elite with fellow travellers whose careers outside parliament as consultants and lobbyists depend on Chinese connections and largesse. They are cultivated with money, travel and entertainment. They cling like limpets to the relationship with China. They have a lot to lose if they upset China. And it shows.

As Upton Sinclair put it so succinctly ‘It is difficult to get a man to understand something when his salary depends on his not understanding it’.

Original article here

Chinese interests play increasing role in Australian political donations

Gina McColl

The many ways political donations buy access

A Chinese government-backed propaganda unit and a swag of companies that stand to gain from the China Australia Free Trade Agreement have made more than half a million dollars of political donations in Victoria, raising concerns about the influence of foreign donors.

Companies linked to Chinese conglomerate Yuhu Group made a donation to then trade minister Andrew Robb’s fundraising entity the day the trade deal was clinched.

Chinese money has become so important to Australian political parties that, at a recent glitzy fundraiser, Victorian Liberal president Michael Kroger made sure there was an interpreter to translate the auction.

Donors with strong links to China contributed $555,000 to the two major parties and fundraising entities in Victoria, a Fairfax Media analysis of Australian Electoral Commission data for 2014-15 reveals.

At least three donors failed to disclose their contributions to the Australian Electoral Commission.

Bayside Forum, which supports the federal Liberal candidate in the seat of Goldstein (where Mr Robb is set to be succeeded by former Human Rights Commissioner Tim Wilson at the July 2 federal election), accepted $100,000 in donations from executives of Chinese agriculture, property development and infrastructure company Yuhu Group.

At the time, Mr Robb was negotiating both ChAFTA and the 12-country Trans-Pacific Partnership.

Mr Robb has a long relationship with Yuhu and its chief Xiangmo Huang. He met with Mr Huang and other senior company executives in Hong Kong in March 2014 to discuss trade and economic co-operation, and to hear Mr Huang’s view on the obstacles to Chinese enterprises in Australia, such as working visas and foreign investment restrictions.

Mr Robb also endorsed Yuhu’s $2 billion investment in Australian agriculture in a joint-venture with a Chinese state-owned enterprise at its launch on September 15, 2014.

According to AEC disclosures, Chaoshan No 1 Trust (of which Mr Huang is a director) made a $50,000 donation to Bayside Forum two months later, on the same day ChAFTA was finalised and details announced by Mr Robb and then prime minister Tony Abbott.

Another $50,000 donation to Bayside Forum, this time by Fu Ocean Pty Ltd (whose director Zhaokai Su is reportedly Yuhu’s office manager), was undated. And two months after the Hong Kong meeting, $30,000 was donated to the New South Wales division of the Liberal Party. It is illegal for property developers to donate to the NSW branch, but a loophole permits it if the funds are intended to contribute to a federal campaign.

The free trade agreement, which came into force on December 20, 2015, has been criticised by the opposition and unions for threatening Australian jobs – particularly a provision that allows Australian-registered companies with 50 per cent Chinese ownership to bring in Chinese labour to work on infrastructure projects of $150 million or more.

Mr Huang and his associates have donated millions of dollars to the Labor and Liberal parties over recent years, and in 2015 stepped in to pay a legal bill on behalf of NSW Labor reformist and fixer, Senator Sam Dastyari.

Mr Robb was Mr Huang’s guest at the Melbourne Cup in 2013, when Mr Huang also presented the trophy. Mr Robb reportedly attended Mr Huang’s daughter Carina’s wedding in Sydney in January 2016, as did Opposition Leader Bill Shorten.

As trade minister, Mr Robb also attended the “Yuhu 2015 Giving Day” on February 6, 2015, held in part to celebrate Mr Huang’s election as President of the Australian Council for the Promotion of Peaceful Reunification of China. That organisation’s activities include hosting Chinese government officials in Australia and lobbying against independence movements in Taiwan, Hong Kong and Tibet.

At the time of the donation, Mr Robb was still negotiating the Trans-Pacific Partnership – a 12-country trade deal which does not include China or Taiwan, but that Taiwan had sought to join.

On February 1, the NSW branch of the ALP revealed its biggest donor, Eng Joo Ang, had given $110,000. The next day Mr Eng told media he couldn’t recall it and later that he had not made the donation. On February 12, a late return was quietly published on the AEC periodic disclosures as an “update”.

Mr Eng is executive vice chairman of the Australian Council for the Promotion of Peaceful Reunification of China.

Mr Robb declined to answer Fairfax Media questions about Bayside Forum’s protocols for handling potential conflicts between fundraising sources and his responsibilities as a minister.

“There were absolutely no conflicts of interest,” he said.

Mr Huang was contacted for comment but did not respond.

Meanwhile, the Victorian Liberals received $15,000 from the China Australia Media Group, believed to be an arm of the Chinese government. The group has twice been outed for hiring Western journalists at news conferences to ask soft questions of government ministers and officials with the aim of spreading Chinese propaganda.

Chinese property developers have also emerged as generous supporters of political parties. In 2013-14, a pair of Brighton property investors with import-export interests Jianping Fu and Min Zhang, donated $200,000 to the Victorian Labor party. Melbourne-based property developer the Ever Bright Group donated $200,000 to the federal Liberal party and Glen Waverley developer Jiandong Huang donated another $100,000.

Richard Gu’s AXF Group, whose development projects include a massive 5500-home project in the city’s west, donated $150,000 to the Victorian Labor party. ZJF Investments, a company owned by property developer Zheng Jiefu (who sought refuge in Melbourne after facing embezzlement charges in China), donated $20,000 to Labor’s state branch.

Both AXF Group and ZJF failed to make their own donations disclosures to the AEC. Fu Ocean disclosed its $30,000 contribution to the NSW Liberals, but failed to disclose the $50,000 Bayside Forum donation.

The AEC said it was following up outstanding returns.

Governance expert Ken Coghill says foreign donations to Australian political parties should be illegal, as they are in many countries including the United States and Britain.

“The Australian political process ought to be something that is not manipulated or distorted by foreign interests,” says the former state Labor MP, now director of the Parliamentary Studies Unit at Monash University.

Original article here

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About steveblizard

Steve Blizard commenced his financial planning career in 1988 from a background of life insurance broking, a field in which he still works. He is a member of the Financial Planning Association and the Responsible Investment Association. His experience ranges from administration of Superannuation to advice regarding insurance, retirement, remuneration and investment planning. Steve is an accredited Remuneration Consultant, specialising in salary packaging. He is a columnist for the Swan Magazine and the WA Business News

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